Category: Carrefour

Introduction

Carrefour is a French retailer operating in several countries in the world. Its biggest markets are situated in Asia and South America. However, the country operates outlets in Europe, particularly France. The retailer has also been a case of success since it is the second biggest retail company in the world.

Several strategies have made Carrefours success possible. On the other hand, the company also suffers some problems that threaten its dominance in the retail business. In general, Carrefour has been one of the most successful retailers in the twentieth and the twenty-first centuries.

How is a strategic plan defined and what examples can you provide the board from your chosen company?

A Strategic plan is a detailed outline of the future intentions of an organization. This outline analyzes the position of the business entity in question. In addition, it defines the measures that are to be applied by the business entity in order to move in the desired direction (Grunig & Kuhn 54).

Thus, the strategic plan is the companys definition of the activities to be undertaken in order to achieve the goals of the organization. It includes the policies that the company intends to use in order to attain its goals. The policies are related to management of finance, human resources, suppliers, and the relationships between the organization and its customers (Grunig & Kuhn 49).

Strategic plan defines the general direction of the business. Furthermore, the strategic plan must take into account the current progress and the reasons for the particular progress. This way, the business is able to model its activities to suit its intended direction.

Recently, Carrefour Group has been experiencing problems with the state of its publicity. The company has been doing well in terms of profit, and the latest survey shows that it is the third biggest profit maker in the retail business (Staertzel 119). However, the business enterprise needs to improve its human resource management.

In addition, the retailer needs to monitor its outlets regarding many unethical practices causing negative publicity. Some of the complaints from the public are false advertisements and unfair competition by the retailer. Improvement of the image of the company should be the top agenda in the companys business. In turn, this will ensure that the company maintains high volume of sales.

How is strategic management defined and what examples can you provide the board from your chosen company?

Strategic management involves assessment of the ability of an organizations management to perform its basic functions to the satisfaction of the stakeholders of the company (Lynch 9). The utilization of the organizations resources is evaluated to determine the level of conformity of the management to the organizations values and goals.

Strategic management is important since it determines whether the organization is going to achieve its objectives or not. For the management to accomplish its mission, it must satisfy the planned objectives regarding all stakeholders such as customers, employees, and even shareholders. Strategic management is the second step after strategic planning. It involves organization of the implementation processes (Lynch 30).

When Carrefour established its outlets in South America and Asia, it had a strategy of involving the people of the particular localities in the stocking of their stores and provision of other services. This was a fruitful strategy for the retailer. However, in consideration of the recent negative publicity, it is important for the organization to monitor the handling of human resource affairs by its subsidiaries and outlet managements (Staertzel 115).

Some of the locally hired workers were reported to be underpaid while others worked in poor conditions. The management can adopt a more attentive kind of management to ensure that its various outlets do not engage in pervasive practices such as misleading advertisements and the sale of expired products.

Thus, the management must dissolve the hierarchal barriers in order to closely monitor its subsidiaries and avoid events that cause negative publicity for the retailer (Staertzel 122). In addition, the retailer can establish a system with which to monitor the human resource welfare globally. This is because the human resources are some of the most important inputs in retail business.

How is strategic formulation defined and what examples can you provide the board from your chosen company?

Strategic formulation involves creation of an outline of the policies that the management should adopt in order to effect the desired change in the organization. For a strategy to be formulated, the inadequacy being targeted should be known. The problem is identified by evaluation of the overall performance of the company in the light of the existing policies (Pearce & Robinson 19).

For the current Carrefours problems, strategy formulation can begin with investigation of the methods used to keep track of the stock on the shelves of the outlets.

An investigation of the standards of the working environment and remuneration of employees, particularly the casual and temporary workers will also aid in making the proper decisions over the direction of the company in future. Depending on the location of each outlet, a strategic management plan can be created for each store while putting into consideration all the problems reported at the specific store.

What role should ethical considerations have in your companys strategic management plan? Provide examples from your chosen transnational company

For any business entity, ethics are important to ensure that the business environment stays in balance. This means that good ethical practices will ensure the support of the community within which the company operates (Gavai, 105).

It is important to ensure that the operations of the company benefit the majority of the people concerned. This conforms to the philosophy of utilitarianism (Mill & Crisp 42). Carrefour has to ensure that their customers, who are the local community, buy genuine products, which are within the allowed shelf life.

The employees of the company are a part of the community that must benefit from the operations of the company. It would be unethical for the company to make high profit while the welfare of its human resources is in a bad state (Staertzel 121). According to contemporary ethical philosophy, an organization is not supposed to reap benefits at the expense of a majority.

The majority could be the local community, suppliers, or even employees of the company. For example, Carrefour spends a lot of money on its environmental responsibilities. The company ensures that no waste from its stores id disposed of in an inappropriate method (Staertzel 124).

How is social responsibility defined? What role should social responsibility considerations have in your companys strategic management plan? Please provide examples from your chosen company

For any business enterprise, social responsibility is one of the most important aspects of business. The concept of responsibility can be viewed in two perspectives. One of the common interpretations is that the business must make profit for it to be considered socially responsible (Hunnicutt 22). Since the business has many stakeholders who are members of the community in which it operates, making profit for the stakeholders is a responsibility for the business. On the other hand, the contemporary view is that the profit belongs to the business alone. For this reason, the business must sacrifice some strategies that would have otherwise assured it more profits for the sake of the community. For example, a business entity is obligated to pay its employees their due wages even if it means that the business will incur a gross loss. Furthermore, a business is obligated to keep the environment clean even if it means that the business will have to spend much of its profits to do so.

Corporate social responsibility means that a business is regarded an individual in the society. Like everyone else, the business has a responsibility towards the larger community. Thus, the business operations should aim at making profit while at the same time being responsible to the host community (Hunnicutt 25). In the case of Carrefour, the retailer is obligated to ensure that the human resource welfare has the best policies. Moreover, the business is obligated to provide the community with the best products for the fairest price. In general, for the retailer to claim genuine success, it must benefit the society in its quest for making profit.

How is competitive advantage defined? What competitive strategies has your transnational company implemented?

There is competition in the business environment at all times. For a business to outdo rivals in marketing a certain product, it can enhance the quality of its commodities. This means that the business maintains its customers due to the quality of its commodities. The products sold by the business entity should be of higher quality that those sold by rivals in the business (Nayal 66).

For example, an electronic company manufacturing cell phones can acquire and maintain customers by manufacturing cell phones using the most advanced technology. The concept of competitive advantage assumes that the high quality product will sell at a high price. Thus, for a business adhering to the principles of competitive advantage, profit is associated with high prices and customer loyalty. Competitive advantage can arise from the ability of the business to reduce the cost of producing a certain product.

Always, Carrefour had the ability to establish in new markets. Its ability to adapt to diverse cultures helped the company open stores in Asia and South America with success. In addition, since the company is the second largest retailer in the world, it is in a position to establish reliable tracking system for its products (Staertzel 113).

Human resource affairs should also not be a problem for the company since it already makes more than average amount of profit. Moreover, the company can engage in research for more innovative strategies, a trend it had perfected in its beginning. Carrefour developed the concept of the hypermarket, a common strategy for retailers around the world.

What measurement guidelines are available to verify strategies effectiveness from your transnational company?

One of the methods that can be used to establish the competitive advantage of a business is evaluation of the level of profit. If the profit made by a business organization is more that the normal amount, it indicates effectiveness of competitive strategies advantage for the particular company (Nayal 53).

If the strategy to be implemented is aimed at realizing a high level of customer satisfaction, then, studying the market to establish the level of customer satisfaction is be the best criterion for measurement of effectiveness of a strategy. Thus, the criterion of measurement of effectiveness of a strategy depends on the targets of the particular strategic plan and implementation procedures (Sin Lin 116).

Carrefour Group opened outlets in the Republic of China and other parts of Asia with the aim of tapping into the large retail market. Actually, the expansion into the Asian and the South American markets is the reason for the high profits the company has been making (Staertzel 102). However, with the use of a balanced scorecard, one can establish that the retailer has to redraw its strategies again in order to establish a good public opinion and human resource welfare record. The business requires a revision of its application of ethics and corporate social responsibility.

What is the definition of environmental scanning? What examples from your chosen company might you offer?

When a business is formulating a strategy, it is important to evaluate the effect of the implementation of the strategies to the business environment. This concerns evaluation of the state of macroeconomic factors. These are economic that influence the business, but are outside the business entity itself (Lynch 84).

They may include the customers, rivals operating in the same line of business, or even suppliers. When performing environmental scanning, the current state of the business is evaluated and trends are established. In addition, the expected reaction of the environment to new strategies is established through deterministic procedures.

In the particular case of Carrefour, the current state of public opinion regarding the company can be assessed. It is also necessary for the retailer to evaluate the expected reaction of the market to its changes in the marketing strategy. Furthermore, it is evident that the current success of the company in foreign markets is a result of the environmental scanning done to establish the culture and the expected reaction of the customers in new business environments.

How is structural leadership defined? What examples from your chosen company might you offer?

Structural leadership involves evaluation of the effectiveness of various segments of an organization and designing the best structure for their success. A structural leader focuses more on the effectiveness of various departments in an organization. In addition, the leadership style focuses more on achievement of objectives rather than formulation of targets that might be otherwise unrealistic (Pearce & Robinson 8).

Thus, an effective structural leader does not create a standard structure for operating business, but allows for modification of the structure to suit business objectives and the prevailing environment. A structural leader takes into account the expected reaction from the society when implementing strategies.

The Carrefour group has adopted this kind of leadership. Every outlet is designed to adapt to its own environment (Staertzel 92). This increases the effectiveness of the organization. Structural leadership appreciates the importance of considering the effect of diversity of the environment. A structural leader sees the business perspective from a social dimension.

How is business continuity defined? What examples from your chosen company might you offer?

In any business organization, there are those activities that are critically important for the survival of the business. These activities have to be functional for the business to run its daily affairs effectively. It is important for the business to ensure that the customers and other stakeholders in a business entity access the particular functions at the appropriate time (Lynch 53).

The Carrefour group has tried to be innovative in order to ensure that the company operations are sustainable. This organization created the idea of the hypermarket and continued to implement the concept in every country it operated (Staertzel, 86). Although the company has suffered several store closures, the idea of opening more stores was implemented with the aim of compensating for the competition in localities where the business has been established for a long time.

How is strategy implementation defined? What examples from your chosen company might you offer?

Strategy implementation is the method that an organization uses to achieve actuation of the recommendations of a strategy. It also defines the way in which the organization controls resources to achieve the desired outcome.

In an effort to customize products for the localities of different outlets, Carrefour group has adopted the initiative of packaging products such as food. This way, they are able to brand their products according to the locality in which they are sold. In addition, Carrefour has adapted to the culture of the specific localities such that the people of the particular region can identify with the supermarkets chain (Dawson & Lee 85). Carrefour group has even adopted slogans associated with the social dimension of the particular markets.

What examples of evaluation and control can you offer regarding your chosen company?

When a firm is in the process of implementing a policy, it is important to assess the performance of the particular strategy. Marketing strategies have a tendency of failing to conform to the expected performance. For this reason, it is necessary to evaluate the level of fidelity of the strategy outcome to the expected results.

Carrefour group has constantly evaluated its market to adjust to the prevailing trends. The company has changed its marketing strategies to suit consumer preference continuously. Carrefours first major revolution was the invention of the hypermarket and discount stores. The hypermarket offered virtually everything under one roof while discount stores offered goods at the lowest prices possible (Staertzel 89).

Summary

In general, Carrefour has proved to be an innovative company. Since the retailer started operating, it has invented one marketing strategy after another. However, competition has necessitated opening of new outlets and stores in many countries. The overall success of the supermarket is due to the appropriate strategies, innovation and proper management.

However, the retailer has suffered some setbacks due to ethical issues. In addition, stiff competition and cultural inadequacies have made the company to exit several countries after selling all their stores. However, with changes in the strategies of the company, it can continue to be one of the biggest retailers in the world.

Works Cited

Dawson, John A., and Jung Lee. International retailing plans and strategies in Asia. Binghamton, NY: International Business Press, 2004. Print.

Gavai, A. K.. Business ethics. Rev. ed. Mumbai [India: Himalaya Pub. House, 2010. Print.

Grunig, Rudolf, and Richard Kuhn. Process-based strategic planning. 3rd ed. Berlin: Springer, 2005. Print.

Hunnicutt, Susan. Corporate social responsibility. Detroit, MI: Greenhaven Press, 2009. Print.

Lynch, Richard L.. Strategic management. 5th ed. Harlow: Financial Times Prentice Hall, 2008. Print.

Mill, John Stuart, and Roger Crisp. Utilitarianism. Oxford: Oxford University Press, 1998. Print.

Nayal, Praveen. Measurement of competitive strategy. Academy of Management Journal Vol.12.Iss. 3 (2001): pp. 52-85. Print.

Pearce, John A., and Richard B. Robinson. Strategic management: formulation, implementation, and control. 7th ed. Boston: Irwin/McGraw-Hill, 2000. Print.

Sin Lin, Chiun. Measuring competitive advantage with an asset-light valuation model. African Journal of Business Management Vol. 5.iss. 13 (2011): 101- 110. Print.

Staertzel, Lene. Carrefour in china: A crossroad between east and west. Carrefour Journal Vol. 6.iss.4 (2011): 85-156. Print.

Information About the Client

The client is a chain of grocery stores, a global food retailer Carrefour with a parent company located in France. The enterprise has been a successful food market member for several decades. The supermarkets of Carrefour chain in many different countries of the world are aiming at satisfying their customers needs for timely delivery of high-quality, fresh, organic, and healthy products. The goods offered by the company are affordable and cover a wide range of options. Carrefour works on leveraging the opportunities of profitable cooperation with farmers to ensure that the process for food items will be satisfying for all buyers.

Information About the Project/Product

The project concentrates on the popularization of the new initiative of Carrefour. This initiative consists in ensuring healthy product delivery for all consumers by providing food transition for everyone (The food transition is underway, Carrefour is meeting consumers new requirements, 2018, para. 4). The company introduces a new approach to cooperation with farmers and food producers. Within this new perspective, the chain of supermarkets shifts the farmers work to organic and pesticide-free production to ensure healthy ecological products for everyone.

Project/Product Background

The issue of air pollution, ecological disasters, and the exhaustion of planet resources is crucial for modern society. People who live in the cities and buy food items on a daily basis are more and more concerned about the methods how food is produced, where it comes from, and how healthy or dangerous it could be (The food transition is underway, Carrefour is meeting consumers new requirements, 2018). Carrefours priority is the health and well-being of its consumers. Since a healthy diet is the core of longevity and the absence of illnesses, it is the food industries responsibility to deliver the best quality of products. Regarding the described background, Carrefour initiates Art for Food to popularize ecological farming as the basis for food production for the supermarkets customers. Within the project, the client offers the buyers a wide range of organically produced food items for a reasonable and competitive price as opposed to a limited assortment of healthy products from other market members (Developing agroecology, n.d.).

Project Details

The project aims to create television and radio advertisements to promote organic food choices available in the Carrefour supermarkets. A TV ad will be about 40 seconds long and will portray a big family around a dinner table with beautiful and tasty dishes with a lot of vegetables on the plates. Children, parents, and grandparents are around the table and are having a meal. In the conversation between the mother who serves vegetable salad to a little son and the grandmother, the grandmother warns that it is better not to buy fruit and vegetables in a supermarket because of pesticides. In response to that, the mother points out the advantages of the Art for Food initiative of Carrefour and underlines that the goods from the company are healthy, ecologically pure, and nutritious for everyone. The budget for this TV advertisement is 25, 000 dollars, and the timeline is 14 days.

A radio advertisement involves the same plot with some background sounds of a happy family enjoying their meal at the beginning of an ad. The central idea of safe organic food available from Carrefour for every average consumer for a reasonable price is also delivered through the dialogue between the mother and the grandmother. The slogan Organic and nutritious food from local farmers for everyone will encourage people to trust the assortment of Carrefour and will increase its competitive capacity. The duration of the radio advertisement will be approximately 30 seconds. The timeline will be ten days, and the budget will equal 5, 000 dollars.

Target Market Analysis

The food and grocery market is probably the largest one all over the world. Since food products are the first range need of any person in any city or town, numerous companies inevitably compete to be the best and the most popular in the area. Carrefour is a big group of supermarkets in many countries both in Europe and in the Americas. Thousands of shops are opened all over the world and are striving to meet the newest requirements of the customers. However, the competition is enormous, and it deals with some similar companies tailoring organic food initiatives. One of the biggest competitors of Carrefour is Walmart which introduces a great variety of products for different types of consumers with different preferences in food.

According to the SWOT analysis, the following information could be presented. The strength of Carrefour is its flexibility in arranging cooperation with local farmers to ensure fresh products deliver on a timely basis, as well as its strong belief in the importance of organic production. The weakness of the company is the lack of supermarkets in the Asia region where the competitors might be more influential and invade the market. The best opportunity for Carrefour is its ability to reform the agriculture and food economy sector by initiating and encouraging pesticide-free food production and more active inclusion of farming into economic interactions. The emerging competition in different countries where the supermarkets of the Carrefour chain are presented is a significant threat for the company.

Target Audience/Product Positioning

The target product positioning should be based on the specific features of the sphere which is food retailing. Carrefour initiates organic food for a healthy diet for a reasonable price affordable for an average buyer. Similar initiatives are available from such a competitor as Walmart. The FCB planning grid shows the positioning of the product within the Think/Feel/Low involvement/High involvement quadrants (See Figure 1). According to Zimbres (2014), food products should be located in a low involvement and high thinking quadrant. In comparison to Walmart, Carrefour is located closer to a feeling dimension, but it is the target of the project to reposition it closer to the high involvement quadrant. Therefore, people will be more involved in the process of product choice by taking responsibility for their nutrition quality.

The Big Idea

The Unique Selling Proposition (USP) of Carrefours initiative for organic pesticide-free food products is to encourage people to trust the brand and identify the difference of its strategic policy from other competitive companies. The project will popularize the innovative approach to cooperation with local farmers. This perspective will satisfy two goals: the guarantee of freshly delivered products on a daily basis due to the close location of the producers, and organic, chemical-free, and healthy food as an affordable item for an average customer.

Targeting Strategies/Positive Product Differentiation

The revealed inside information articulated in the advertisements will differentiate the products offered by Carrefour from those presented by other competitive companies and will ensure its leading position on the market. To implement the project in practice, it is essential to incorporate all the advantages that deal with the offered initiative and concisely present them. Under the modern circumstances of the ubiquity of all sorts of advertisements, people will pay attention to something less provocative but more true and open. Thus, the project should allow its target audience to be informed and ultimately make a reasonable choice.

References

Developing agroecology. (n.d.).

The food transition is underway, Carrefour is meeting consumers new requirements. (2018).

Zimbres, T. M. (2014). Environmental advertising and food products: Is there an ideal matchup? Web.

Introduction

The purpose of this report is to analyze the marketing strategy of Carrefour UAE. The analysis will begin with a brief overview of the companys history and background. This will be followed by an analysis of the market segments and the target markets that are served by the company. The companys product mix and pricing strategies will also be analyzed. The report will end with the analysis of the distribution and promotional strategies adopted by the company.

History and Background

Carrefour is a leading retailer that was founded in France over 40 years ago (Carrefour UAE). In the last three decades, it has achieved rapid growth by joining several overseas markets such as the United Arab Emirates (UAE). The company joined the UAE in 1995 where it currently operates under a franchise agreement with the Majid Al-Futtaim Group (Carrefour UAE). The companys mission is to offer a wide range of low-priced, high quality products, which include food, personal care, and household goods. In order to achieve this mission, the company operates over 20 outlets in the UAE. Carrefour is considered to be the most dynamic and fastest growing retailer in the UAE. The companys success is mainly attributed to its ability to offer excellent customer service and to align its products to market needs.

Market Segments and Target Market

A market segment refers to a distinct group of consumers who share homogeneous characteristics and needs. Generally, Carrefour serves three market segments in the retail industry. These include grocery, personal care products, and household goods market. The grocery market caters for customers who are interested in a variety of foodstuffs such as vegetables, meat, and soft drinks (Carrefour UAE). The personal care market caters for customers who are interested in cosmetics, toiletries, and other beauty products. The household goods market serves customers who are interested in various home appliances.

Carrefour identifies its target customers in the three segments based on geographic, behavioral, and psychological variables. In geographic segmentation, the company focuses on serving the urban population in the UAE (Carrefour UAE). In this case, its target market includes the residents of major cities such as Dubai. In behavioral segmentation, the company focuses on serving customers who are interested in high quality foodstuffs and consumer products. In psychographic segmentation, the company considers consumers interests, values, and lifestyles to identify its target market. In this regard, the company targets customers who are interested in shopping in a one-stop store that offers a variety of products.

Product Mix and Pricing Strategy

Carrefours product mix includes a variety of goods, which include groceries, manufactured foods, soft drinks, apparel, kitchenware, bakery products, restaurant food, plastic goods, home appliances, and garden equipment (Carrefour UAE). A diverse product mix enables companies to serve customers with varied tastes and preferences. Thus, Carrefours product strategy focuses on differentiation in order to meet the needs of the UAE population that consists of Arabs and expatriates from different cultures. Specifically, the company offers products that are developed according to western cultures and values to cater for the American and European expatriates in the UAE.

The company has also adapted its products to the Islamic culture in order to meet the needs of the Arab population in the UAE. For instance, the Islamic culture prohibits consumption of pork. Thus, the companys grocery section sells halal-certified food products (foodstuffs that do not contain pork) in order to serve the Arab population (Carrefour UAE). The company also changes its product mix according to the seasons and religious holidays in the UAE. For instance, during festivals such as Eid and Ramadan, the company stocks several gift products that reflect the Arab culture in order to take advantage of the increased spending among Arabs.

Carrefour uses the penetration pricing strategy to gain market share in the UAE. This strategy involves selling products at low prices in order to increase sales by attracting more customers. Carrefour has positioned itself as a discounter that enables customers to save their money. The rationale of adopting the penetration pricing strategy is that the retail industry in the UAE is very competitive and customers are price sensitive. Thus, offering low prices enables the company to overcome competition. Although the company offers low prices, its brand image has not been diluted due to its strong brand name.

Distribution and Promotional Strategies

Carrefour uses three main distribution channels to reach its customers in the UAE. These include hypermarkets, supermarkets, and discount stores (Carrefour UAE). These channels are mainly used to sell consumer goods and groceries. The company also uses convenience stores, foodservice stores, and virtual stores to distribute its products. The convenience and foodservice stores are mainly used to distribute food products. The companys virtual store is an e-commerce platform that enables customers to shop online through the companys website rather than visiting the physical stores (Carrefour UAE).

The virtual store improves shopping experience by enabling customers to make their purchases at their convenience. Using several distribution channels has two advantages. First, it enables the company to serve particular market segments. For instance, foodservice stores cater exclusively for customers who are interested in purchasing food products. Second, the distribution channels improve the companys brand visibility by enabling it to serve as many customers as possible. Since the purchasing culture in the UAE promotes shopping within malls, the company has established most of its stores in large malls in order to increase its sales.

The companys promotional strategy involves using adverts to create awareness about its products. The adverts are placed in print and electronic media, as well as, the companys stores and website. Given the cultural diversity in the UAE, adverts can only be effective if they are adapted to the needs of the local market. Thus, Carrefour has adapted its adverts in the UAE by writing them in both English and Arabic to overcome language barriers (Carrefour UAE). As a low price retailer, Carrefour uses discounts as a promotional strategy to attract customers. For instance, holders of the companys Najm card enjoy up to 4% discounts whenever they purchase items at any of the companys outlets.

Conclusion

Carrefour is one of the most successful retailers in the UAE. The company owes its success to its pricing strategy that focuses on expanding its market share by offering low prices. The company offers a variety of products in order to satisfy the diverse tastes and preferences of the customers in the UAE. This strategy is supported by the companys ability to use several distribution channels to reach its customers.

Works Cited

Burrow, James. Marketing. New York: McGraw-Hill, 2008. Print.

Cant, Michael, James Strydom and Charles Jooste. Marketing Management. New York: John Wiley and Sons, 2009. Print.

Carrefour UAE. About Carrefour. Majid Al-Futtaim-Carrefour. 2013. Web.

El-Adly, Mohammed. Shopping Malls Attractiveness: A Segmentation Approach. International Journal of Retail and Distribution Management 35.11 (2007): 936-950. Print.

Jayachandran, Sai. Marketing Management. New Delhi: Excel Books, 2004. Print.

Introduction

Carrefour is a French retailer operating in several countries in the world. Its biggest markets are situated in Asia and South America. However, the country operates outlets in Europe, particularly France. The retailer has also been a case of success since it is the second biggest retail company in the world.

Several strategies have made Carrefour’s success possible. On the other hand, the company also suffers some problems that threaten its dominance in the retail business. In general, Carrefour has been one of the most successful retailers in the twentieth and the twenty-first centuries.

How is a strategic plan defined and what examples can you provide the board from your chosen company?

A Strategic plan is a detailed outline of the future intentions of an organization. This outline analyzes the position of the business entity in question. In addition, it defines the measures that are to be applied by the business entity in order to move in the desired direction (Grünig & Kühn 54).

Thus, the strategic plan is the company’s definition of the activities to be undertaken in order to achieve the goals of the organization. It includes the policies that the company intends to use in order to attain its goals. The policies are related to management of finance, human resources, suppliers, and the relationships between the organization and its customers (Grünig & Kühn 49).

Strategic plan defines the general direction of the business. Furthermore, the strategic plan must take into account the current progress and the reasons for the particular progress. This way, the business is able to model its activities to suit its intended direction.

Recently, Carrefour Group has been experiencing problems with the state of its publicity. The company has been doing well in terms of profit, and the latest survey shows that it is the third biggest profit maker in the retail business (Staertzel 119). However, the business enterprise needs to improve its human resource management.

In addition, the retailer needs to monitor its outlets regarding many unethical practices causing negative publicity. Some of the complaints from the public are false advertisements and unfair competition by the retailer. Improvement of the image of the company should be the top agenda in the company’s business. In turn, this will ensure that the company maintains high volume of sales.

How is strategic management defined and what examples can you provide the board from your chosen company?

Strategic management involves assessment of the ability of an organization’s management to perform its basic functions to the satisfaction of the stakeholders of the company (Lynch 9). The utilization of the organization’s resources is evaluated to determine the level of conformity of the management to the organization’s values and goals.

Strategic management is important since it determines whether the organization is going to achieve its objectives or not. For the management to accomplish its mission, it must satisfy the planned objectives regarding all stakeholders such as customers, employees, and even shareholders. Strategic management is the second step after strategic planning. It involves organization of the implementation processes (Lynch 30).

When Carrefour established its outlets in South America and Asia, it had a strategy of involving the people of the particular localities in the stocking of their stores and provision of other services. This was a fruitful strategy for the retailer. However, in consideration of the recent negative publicity, it is important for the organization to monitor the handling of human resource affairs by its subsidiaries and outlet managements (Staertzel 115).

Some of the locally hired workers were reported to be underpaid while others worked in poor conditions. The management can adopt a more attentive kind of management to ensure that its various outlets do not engage in pervasive practices such as misleading advertisements and the sale of expired products.

Thus, the management must dissolve the hierarchal barriers in order to closely monitor its subsidiaries and avoid events that cause negative publicity for the retailer (Staertzel 122). In addition, the retailer can establish a system with which to monitor the human resource welfare globally. This is because the human resources are some of the most important inputs in retail business.

How is strategic formulation defined and what examples can you provide the board from your chosen company?

Strategic formulation involves creation of an outline of the policies that the management should adopt in order to effect the desired change in the organization. For a strategy to be formulated, the inadequacy being targeted should be known. The problem is identified by evaluation of the overall performance of the company in the light of the existing policies (Pearce & Robinson 19).

For the current Carrefour’s problems, strategy formulation can begin with investigation of the methods used to keep track of the stock on the shelves of the outlets.

An investigation of the standards of the working environment and remuneration of employees, particularly the casual and temporary workers will also aid in making the proper decisions over the direction of the company in future. Depending on the location of each outlet, a strategic management plan can be created for each store while putting into consideration all the problems reported at the specific store.

What role should ethical considerations have in your company’s strategic management plan? Provide examples from your chosen transnational company

For any business entity, ethics are important to ensure that the business environment stays in balance. This means that good ethical practices will ensure the support of the community within which the company operates (Gavai, 105).

It is important to ensure that the operations of the company benefit the majority of the people concerned. This conforms to the philosophy of utilitarianism (Mill & Crisp 42). Carrefour has to ensure that their customers, who are the local community, buy genuine products, which are within the allowed shelf life.

The employees of the company are a part of the community that must benefit from the operations of the company. It would be unethical for the company to make high profit while the welfare of its human resources is in a bad state (Staertzel 121). According to contemporary ethical philosophy, an organization is not supposed to reap benefits at the expense of a majority.

The majority could be the local community, suppliers, or even employees of the company. For example, Carrefour spends a lot of money on its environmental responsibilities. The company ensures that no waste from its stores id disposed of in an inappropriate method (Staertzel 124).

How is social responsibility defined? What role should social responsibility considerations have in your company’s strategic management plan? Please provide examples from your chosen company

For any business enterprise, social responsibility is one of the most important aspects of business. The concept of responsibility can be viewed in two perspectives. One of the common interpretations is that the business must make profit for it to be considered socially responsible (Hunnicutt 22). Since the business has many stakeholders who are members of the community in which it operates, making profit for the stakeholders is a responsibility for the business. On the other hand, the contemporary view is that the profit belongs to the business alone. For this reason, the business must sacrifice some strategies that would have otherwise assured it more profits for the sake of the community. For example, a business entity is obligated to pay its employees their due wages even if it means that the business will incur a gross loss. Furthermore, a business is obligated to keep the environment clean even if it means that the business will have to spend much of its profits to do so.

Corporate social responsibility means that a business is regarded an individual in the society. Like everyone else, the business has a responsibility towards the larger community. Thus, the business operations should aim at making profit while at the same time being responsible to the host community (Hunnicutt 25). In the case of Carrefour, the retailer is obligated to ensure that the human resource welfare has the best policies. Moreover, the business is obligated to provide the community with the best products for the fairest price. In general, for the retailer to claim genuine success, it must benefit the society in its quest for making profit.

How is competitive advantage defined? What competitive strategies has your transnational company implemented?

There is competition in the business environment at all times. For a business to outdo rivals in marketing a certain product, it can enhance the quality of its commodities. This means that the business maintains its customers due to the quality of its commodities. The products sold by the business entity should be of higher quality that those sold by rivals in the business (Nayal 66).

For example, an electronic company manufacturing cell phones can acquire and maintain customers by manufacturing cell phones using the most advanced technology. The concept of competitive advantage assumes that the high quality product will sell at a high price. Thus, for a business adhering to the principles of competitive advantage, profit is associated with high prices and customer loyalty. Competitive advantage can arise from the ability of the business to reduce the cost of producing a certain product.

Always, Carrefour had the ability to establish in new markets. Its ability to adapt to diverse cultures helped the company open stores in Asia and South America with success. In addition, since the company is the second largest retailer in the world, it is in a position to establish reliable tracking system for its products (Staertzel 113).

Human resource affairs should also not be a problem for the company since it already makes more than average amount of profit. Moreover, the company can engage in research for more innovative strategies, a trend it had perfected in its beginning. Carrefour developed the concept of the hypermarket, a common strategy for retailers around the world.

What measurement guidelines are available to verify strategies effectiveness from your transnational company?

One of the methods that can be used to establish the competitive advantage of a business is evaluation of the level of profit. If the profit made by a business organization is more that the normal amount, it indicates effectiveness of competitive strategies advantage for the particular company (Nayal 53).

If the strategy to be implemented is aimed at realizing a high level of customer satisfaction, then, studying the market to establish the level of customer satisfaction is be the best criterion for measurement of effectiveness of a strategy. Thus, the criterion of measurement of effectiveness of a strategy depends on the targets of the particular strategic plan and implementation procedures (Sin Lin 116).

Carrefour Group opened outlets in the Republic of China and other parts of Asia with the aim of tapping into the large retail market. Actually, the expansion into the Asian and the South American markets is the reason for the high profits the company has been making (Staertzel 102). However, with the use of a balanced scorecard, one can establish that the retailer has to redraw its strategies again in order to establish a good public opinion and human resource welfare record. The business requires a revision of its application of ethics and corporate social responsibility.

What is the definition of environmental scanning? What examples from your chosen company might you offer?

When a business is formulating a strategy, it is important to evaluate the effect of the implementation of the strategies to the business environment. This concerns evaluation of the state of macroeconomic factors. These are economic that influence the business, but are outside the business entity itself (Lynch 84).

They may include the customers, rivals operating in the same line of business, or even suppliers. When performing environmental scanning, the current state of the business is evaluated and trends are established. In addition, the expected reaction of the environment to new strategies is established through deterministic procedures.

In the particular case of Carrefour, the current state of public opinion regarding the company can be assessed. It is also necessary for the retailer to evaluate the expected reaction of the market to its changes in the marketing strategy. Furthermore, it is evident that the current success of the company in foreign markets is a result of the environmental scanning done to establish the culture and the expected reaction of the customers in new business environments.

How is structural leadership defined? What examples from your chosen company might you offer?

Structural leadership involves evaluation of the effectiveness of various segments of an organization and designing the best structure for their success. A structural leader focuses more on the effectiveness of various departments in an organization. In addition, the leadership style focuses more on achievement of objectives rather than formulation of targets that might be otherwise unrealistic (Pearce & Robinson 8).

Thus, an effective structural leader does not create a standard structure for operating business, but allows for modification of the structure to suit business objectives and the prevailing environment. A structural leader takes into account the expected reaction from the society when implementing strategies.

The Carrefour group has adopted this kind of leadership. Every outlet is designed to adapt to its own environment (Staertzel 92). This increases the effectiveness of the organization. Structural leadership appreciates the importance of considering the effect of diversity of the environment. A structural leader sees the business perspective from a social dimension.

How is business continuity defined? What examples from your chosen company might you offer?

In any business organization, there are those activities that are critically important for the survival of the business. These activities have to be functional for the business to run its daily affairs effectively. It is important for the business to ensure that the customers and other stakeholders in a business entity access the particular functions at the appropriate time (Lynch 53).

The Carrefour group has tried to be innovative in order to ensure that the company operations are sustainable. This organization created the idea of the hypermarket and continued to implement the concept in every country it operated (Staertzel, 86). Although the company has suffered several store closures, the idea of opening more stores was implemented with the aim of compensating for the competition in localities where the business has been established for a long time.

How is strategy implementation defined? What examples from your chosen company might you offer?

Strategy implementation is the method that an organization uses to achieve actuation of the recommendations of a strategy. It also defines the way in which the organization controls resources to achieve the desired outcome.

In an effort to customize products for the localities of different outlets, Carrefour group has adopted the initiative of packaging products such as food. This way, they are able to brand their products according to the locality in which they are sold. In addition, Carrefour has adapted to the culture of the specific localities such that the people of the particular region can identify with the supermarkets chain (Dawson & Lee 85). Carrefour group has even adopted slogans associated with the social dimension of the particular markets.

What examples of evaluation and control can you offer regarding your chosen company?

When a firm is in the process of implementing a policy, it is important to assess the performance of the particular strategy. Marketing strategies have a tendency of failing to conform to the expected performance. For this reason, it is necessary to evaluate the level of fidelity of the strategy outcome to the expected results.

Carrefour group has constantly evaluated its market to adjust to the prevailing trends. The company has changed its marketing strategies to suit consumer preference continuously. Carrefour’s first major revolution was the invention of the hypermarket and discount stores. The hypermarket offered virtually everything under one roof while discount stores offered goods at the lowest prices possible (Staertzel 89).

Summary

In general, Carrefour has proved to be an innovative company. Since the retailer started operating, it has invented one marketing strategy after another. However, competition has necessitated opening of new outlets and stores in many countries. The overall success of the supermarket is due to the appropriate strategies, innovation and proper management.

However, the retailer has suffered some setbacks due to ethical issues. In addition, stiff competition and cultural inadequacies have made the company to exit several countries after selling all their stores. However, with changes in the strategies of the company, it can continue to be one of the biggest retailers in the world.

Works Cited

Dawson, John A., and Jung Lee. International retailing plans and strategies in Asia. Binghamton, NY: International Business Press, 2004. Print.

Gavai, A. K.. Business ethics. Rev. ed. Mumbai [India: Himalaya Pub. House, 2010. Print.

Grünig, Rudolf, and Richard Kühn. Process-based strategic planning. 3rd ed. Berlin: Springer, 2005. Print.

Hunnicutt, Susan. Corporate social responsibility. Detroit, MI: Greenhaven Press, 2009. Print.

Lynch, Richard L.. Strategic management. 5th ed. Harlow: Financial Times Prentice Hall, 2008. Print.

Mill, John Stuart, and Roger Crisp. Utilitarianism. Oxford: Oxford University Press, 1998. Print.

Nayal, Praveen. “Measurement of competitive strategy.” Academy of Management Journal Vol.12.Iss. 3 (2001): pp. 52-85. Print.

Pearce, John A., and Richard B. Robinson. Strategic management: formulation, implementation, and control. 7th ed. Boston: Irwin/McGraw-Hill, 2000. Print.

Sin Lin, Chiun. “Measuring competitive advantage with an asset-light valuation model.” African Journal of Business Management Vol. 5.iss. 13 (2011): 101- 110. Print.

Staertzel, Lene. “Carrefour in china: A crossroad between east and west.” Carrefour Journal Vol. 6.iss.4 (2011): 85-156. Print.

Today millions of people from France, Argentina, Brazil, China and many other countries associate the word “Carrefour” with convenience, quality, and the best service. That is why the chain of supermarkets and hypermarkets Carrefour is considered as the second greatest company in the industry round in the world.

When the first store of this brand was opened in France in 1959 its founders concentrated on the most effective principles of marketing which were close to customers. Thus, the strategy has not changed, and the company continues to attract the customers with high quality of products, low prices, and innovative approaches to marketing.

During many decades Carrefour keeps its leading positions at the market. Every year the leaders of the company do all their possible to broaden the geographic horizons and to attract more and more people to the world of hypermarkets where everything is developed and improved for their comfort. This winning company was established in France by the representatives of such families as Fournier and Defforey (Grant 2005).

The name of the company means a thoroughfare. “In other words, the name signifies that is convenient to shop there” (“The history of Carrefour”). The start was rather successful. Nevertheless, the real revolution was made in 1963 when Marcel Fournier, Denis Defforey, and Jacques Defforey invented a progressive concept of a hypermarket (“The history of Carrefour”).

“Hypermarkets became a rapid success, revolutionizing the retail industry in France and worldwide” (“Carrefour SA”).One more important detail was the idea of convenient parking zone near the supermarkets and hypermarkets.

The next stage was the opening of the first hypermarket outside France in Belgium. It was the begging of a new age for the development of the brand. Nowadays customers know the hypermarkets of Carrefour “under more than two dozen names including Carrefour, Champion, Shopi, Marché Plus, Dia, Ed, and Promocash” (“Carrefour SA”).

Reference List

Carrefour SA. (n.d.). Retrieved from http://www.fundinguniverse.com/company-histories/carrefour-sa-history/

Grant, T. (ed.). (2005). International directory of company histories. USA: St. James Press.

The history of Carrefour. (n.d.). Retrieved from https://historyofbusiness.blogspot.com/2009/09/history-of-carrefour.html

Introduction

For any organization, the quest for competitive advantage requires that the company adopts a strategy that can decide the direction of business growth. Michael Porter proposes a model of three generic strategies that can be applied in understanding the makeup of business organizations. This paper compares two different organizations, Carrefour and Emirates Islamic Bank using Porter’s value chain analysis and Porter’s five forces model.

Description of Emirates Islamic Bank and Carrefour Using Porter’s Generic Strategies

A competitive strategy is perceived as a comprehensive blueprint for business growth and competition. Porter outlined three generic strategies for the attainment of competitive advantage. These include cost leadership, the focus business strategy, and the differentiation strategy.

Carrefour makes use of its size to implement the differentiation strategy and offer discounts on its products. Though Carrefour is largely based in Europe, the firm boasts of stores in four continents including the Americas, Asia, Europe, Africa, and the Middle East. The giant retailer focuses on entering new markets and has a considerable presence in the United Arab Emirates (UAE).

Carrefour functions in a diversity of retail structures such as hypermarkets, automotive centers, mini-markets, warehouse stores, and supermarket. The main household goods sold at Carrefour include household electronics, consumer goods, foodstuffs, and clothing. The company uses economies of scale to offer attractive prices and discounts to maintain a competitive advantage.

Emirates Islamic Bank provides all types of financial services in line with Islamic sharia, which outlaws usury. Emirates Islamic Bank implements a focus business strategy and aims to become a reputable provider of financial services.

This strategy suits the Emirates Islamic Bank since it seeks to fulfill a specific need in the financial services sector. It, therefore, focuses on a narrow segment of the financial market. Carrefour, on the other hand, provides a range of household goods and services, including family apparel, electronics, shoes, photo processing, toys, and fabric.

Emirates Islamic Bank uses the intranet, an interactive website, extranet, and a web-based e-CRM system to improve its leveraging of information technology and obtain a competitive advantage.

The ability of Emirates Islamic Bank to stand out from the crowd of organizations that provide financial services relies on its strategy of enhancing business functionality, service quality, and good customer relationships.

The Emirates Islamic Bank has partnered with the National Bank of Dubai to offer the best services to its clients. A safe, accessible, and reliable financial partner is what Emirates Islamic Bank seeks to become to set itself apart as a unique financial service provider.

Carrefour’s strategy involves the marketing of quality household products at the most affordable price. One of the techniques employed by Carrefour in its quest to become a market leader in the application of information technology, especially management information systems.

Carrefour also procures its supplies directly from manufacturers, thereby eliminating costly middlemen. The main divisions of Emirates Islamic Bank include sales and marketing, research and development, human resource management, and information technology.

Role of MIS in Generating Business Intelligence and Acquiring a Competitive Advantage

Information systems play a significant role in the adoption of any of the three generic strategies (Koontz, 2010). Companies in the same industry as Carrefour use the power offered by information systems to improve company presence and reduce the cost of advertising. Kmart, for instance, uses the internet to conduct e-procurement, which reduces the cost associated with the procurement process.

Organizations that adopt the differentiation strategy use information systems to create unique products in their organizations. Banks apply advanced technological steps to measure the effectiveness of their advertisement campaigns (Monks & McMackin, 2001). Differentiated companies can also use social networking to understand customer needs so that they can tailor their services to customer preferences.

Porter’s Value Chain Analysis of Carrefour and Emirates Islamic Bank

Porter’s value chain model describes an organization’s processes and connects the processes to the competitive location of the organization (Koontz, 2010). The value chain analysis seeks to assess the contributions made by each activity to the company products. Porter’s value chain model identifies primary activities and sets them apart from support activities.

The figure below represents Porter’s value chain analysis.

While primary activities are directly concerned with the generation of the product, support activities assist in the facilitation of efficiency and effectiveness of the products or services.

According to Porter’s value chain analysis, primary activities can be categorized as outbound logistics, marketing and sales, operations, inbound logistics, and service. Support activities in the value chain analysis include human resource management, procurement, infrastructure, and technological development.

The value chain model outlines certain business processes which require competitive strategies and the application of information systems. Information systems can be leveraged by Carrefour and Emirates Islamic Bank to improve the value of their processes and obtain a competitive advantage.

Carrefour employs a value web that seeks to improve the efficacy of the value and supply chains by linking the organization to its partners, customers, and suppliers.

Some important primary activities to consider include inbound logistics management as well as outbound logistic management (Koontz, 2010). For both companies, inbound logistics includes activities that facilitate the acquisition, storage, and dissemination of input. Carrefour possesses a fast and well responsive transport equipment system boosted by more than six thousand trucks.

The philosophy of the Carrefour is decentralization, and the company uses resources to execute the cost leadership strategy. In terms of logistics, Carrefour conducts a host country purchasing for its retail products, which allow the company to meet local government regulations.

For Emirates Islamic Bank, some of the financial services offered coincide with sale processes of the bank. Other services such as mortgages are delivered at a later date. Product delivery at Emirates Islamic Bank is highly reliant on information technology such as automated teller machines. Functions within the marketing aspect of the Emirates Islamic Bank include promotions, data marketing, web design, and direct mail.

Using Porter’s Five Forces Model to Compare Emirates Islamic Bank and Carrefour

Porter’s five forces model is a business strategy assessment tool that examines the value of an industry (Koontz, 2010). It helps an organization’s management to comprehend the position of the company in a competitive market as well as possible products and ventures.

The five forces model examines five factors, which include competitive challenge, new entrants into the market, possible substitute products, power of customers, and the power held by suppliers.

Traditional Competitors

When analyzing an industry, understanding the power of existent competitors is important, especially if there is little differentiation between the products of the company and competing products (Koontz, 2010).

The chief traditional competitor to Emirates Islamic Bank for its Islamic banking market is the Abu Dhabi Islamic Bank (ADIB), which commands a considerable percentage of the banking market share in the United Arab Emirates.

Carrefour, on the other hand, faces competition from other household essential companies like Kmart, Sears, and Home Essentials General Trading LLC. With Sears and Kmart growing their presence in the UAE, Carrefour faces strong competition for the market for its products.

Threat Posed by New Entrants into the Market

When it is easy for new companies to enter the market, the threat to existing organizations is likely to be high (Wei, 2006). It is relatively difficult for new foreign banks to enter the UAE Islamic banking market. This means that Emirates Islamic Bank is relatively safe from the cutthroat competition that is often introduced by the entry of foreign banks.

New entrants to a market affect the profitability of existing companies by introducing new competition, thereby distorting the attractiveness of the industry (Koontz, 2010).

For the household essentials industry, the entry barriers for new companies in the UAE are relatively high. Carrefour, therefore, is not likely to worry about competition posed by novice companies. However, compared to Emirates Islamic Bank, the market of Carrefour is more likely to attract new entrants since it is less guarded by Islamic laws.

Substitute Products

Though the customers of Carrefour have more options regarding alternative products, the low prices offered by Carrefour due to economies of scale cannot be easily matched by other companies. Online shopping provides an alternative to the variety of products provided by Carrefour.

In the case of Emirates Islamic Bank, the other alternative products available to the clients of Islamic banking are loan shark services and conventional banking. However, Islamic banking has more appeal in the UAE than conventional banking due to the people’s religious beliefs and the low-interest rates compounded by Islamic banks.

Moreover, loan shark services are procured as a last-minute resort due to their exploitative nature. Other alternatives to Islamic banking include taking loans from friends, investing in homes and the stock market as well as keeping money in homes.

The Bargaining Ability of Customers

Customers of a company can influence the direction taken by the firm, especially when there is little differentiation from the services or goods offered by competing firms (Becker & Huselid, 2006). The customer base of Emirates Islamic Bank for its Islamic banking services is not restricted to any social class in the UAE community.

On the contrary, the bank offers its services to any citizen in need of financial intermediary services. Since the business of Emirates Islamic Bank relies considerably on the savings done by its customers, customers are very influential in determining the future and profitability of the company.

Unlike Emirates Islamic Bank, which is heavily reliant on customer tastes and preferences, Carrefour rarely takes the needs of its customers into consideration. On the contrary, Carrefour banks on the convenience it offers a one-stop shopping place for most household goods. The customer, therefore, does not significantly influence the operations at Carrefour.

The power of Suppliers

The main suppliers of Emirates Islamic Bank are the company’s customers. Other suppliers do not have the power over the bank since the products that they supply can be easily accessed from other suppliers.

Some of the suppliers of Carrefour include Kraft Foods, Nestle, Procter & Gamble, Hewlett-Packard, Unilever, and Johnson & Johnson. These suppliers influence the pricing of Carrefour products since they are the main producers of the goods and services.

Proposal for Improvement

Carrefour can apply information systems to reduce the cost of conducting business, thereby lowering the cost of goods and services. It can implement an online business-to-consumer model to reach its customers and eliminate the costs associated with retail stores and middlemen and obtain a competitive advantage. Emirates Islamic Bank can use information systems to create differentiated feature unique to its Islamic customer base.

References

Becker, B. & Huselid, M. (2006). Strategic Human Resources Management: Where Do We Go From Here? Journal of Management, 32(6), 898-925.

Monks, K. & McMackin J. (2001). Designing and aligning an HR system. Human Resource Management, 11(2), 57–72

Koontz, H. (2010). Essentials of management. USA: Tata McGraw-Hill Education.

Wei, L. (2006). Strategic human resource management: Determinants of fit. Research and Practice in Human Resource Management, 14(2), 49-60.

Introduction

Headquartered in France, the Carrefour Department Store in Abu Dhabi is a subsidiary of the Carrefour S.A., which was established fifty-eight years ago. The Carrefour Department Store is a very successful supermarket store that serves more than three thousand customers in a day. The store is arranged into four departments to pool goods with similar purchasing trends. The departments are Bakery, Food and Groceries, Clothing, and Electronics.

These four departments are served by 20 cashiers besides an extra cashier in the special service line that serves customers who purchase less than ten items. The store is associated with providing a variety of products all under one roof at very competitive pricing. The Carrefour Department Store is well positioned within the external environment as a result of diverse products, high economies of scale due to a large number of customers, and a well-developed supply chain channel. However, the suppliers have very high power owing to the fact that most of the goods sold in the supermarket originate from independent suppliers. The supermarket also faces the challenge of competition from many stores and mall retailing the same goods and services.

From the analysis, it is apparent that the Carrefour Department Store offers very affordable and competitive pricing for the products it retails. Besides, the store has a well-structured service charter that stresses quality and timely service. However, the Carrefour Department Store is current faced by poor service delivery due to an imbalance between the workforce and the number of customers. Apparently, the current number of cashiers is not enough to serve customers in a timely manner. Therefore, there is a need to remodel the current operations management in service delivery to increase the continuum value of service delivery.

Organization Service OM Analysis

The Carrefour Department Store functions on the pillar of the total quality management system. The supermarket is proactive in safeguarding assets and resources, sustaining efficiency in operations, and ensuring completeness in the management strategies. These strategies support communicational culture, efficiency, and optimal resource use in its service delivery to customers (Escrig-Tena, Bou-Llusar, Beltran, & Roca-Puig 2011). The business has integrated a corporate disclosure and system of litigation variables that are connected at a central point by strategic planning. The flexible service approach adopted by the Carrefour Department Store is comprehensive of the exploratory perspectives, for example, the specialized procedure of comprehension of the operations and legitimate utilization of measurable devices. These devices are basic in checking and dealing with the logistics behind the business capacities (Witcher & Chau 2010).

Operation Management Activities

The OM activities strategies of the Carrefour Department Store are to ensure long-term and sustainable operations. For the implementation of the strategy, the management balances both the short-term and long-term consideration towards decision making (Escrig-Tena et al. 2011). Management that ensures long term obligations is fulfilled. They consider the role played by planning for resources in technology, continued innovations in the production of new products, and conducting researches in the market to identify market niches within the customers (Witcher & Chau 2010).

For instance, the long-term expansion and further market penetration have been integrated through a series of beneficial partnerships, performance evaluation, and proactive innovation in the services to meet the demands of its diverse customers. Although operations management systems experience constant metamorphosis as a result of short-term, mid-term, and long-term goal planning, the store cannot operate efficiently without quality system functioning (Powell 2011).

At the Carrefour Department Store, there are systems in place to measure success as a component of the existing operational structure. Generally, this quality operations management system satisfies requirements within the budget and time schedule without disintegrating the initial goal projections. However, the current changes in the weights of labor cost and operating costs have substantially altered the final weighted average rating for the store (Escrig-Tena et al. 2011). The quality operations management system performs optimally via the integration of appropriate scientific factors of production.

To enrich artistic managerial talents, a balance in the factors of production comes in handy to not only magnify the margins of success but also to ensure a smooth transition of an idea or an event after another, as is the case at the store. Besides, to avoid an imminent failure, the current operations management system at the store is focused on a defined edge in balancing the labor and operation costs (Witcher & Chau 2010). Therefore, the Carrefour Department Store has put in place stringent measures and strategies aimed and monitoring expansionary modules within feasible levels. These measures include techniques that are in use at the store to monitor sustainability by application of the scientific management strategies to balance the factors of the production matrix (Escrig-Tena et al. 2011). The measures have been successful, despite the current challenges facing the Carrefour Department Store.

Problem Identification

Despite the quality in its operations management, the Carrefour Department Store faces the challenge of delayed customer service due to inability of the current workforce of twenty cashiers. Many customers often complain of long queues and sometimes take more than ten minutes to be served at the counter, despite the Carrefour Department Store’s promise of efficiency and timely services. Although the Carrefour Department Store has added a new service line consisting of a cashier designated to serve customers who buy less than ten items to minimize the queuing, the seems to be very minimal impact in the overall efficiency in customer service since the complaints have not ceased (Escrig-Tena et al. 2011). Specifically, the situation becomes dire during the weekends when there is high traffic of customers in the store since the bakery, clothing, electronics, and food sections are always busy.

Proposed Solution

Decision Analysis

The store should hire four more cashiers to reduce the customer waiting time. The viability of this proposal is discussed as follows. The model is based on the assumption that the service time follows an exponential distribution. The number of servers is multiple. Also, the waiting room is unlimited. Thus, the supermarket can hold unlimited number of customers. Further, the arrival time is estimated at 160 customers per hour. The service rate is 200 customers per hour. Also, the salary for each cashier is estimated at AED3, 000.

Waiting Lines, Queuing Models and transportation model

The table below shows calculation of waiting time for customers when the company employs 20 cashiers.

Thus, the average waiting time in the line is 0.12403 while the average time in the system is 0.29070. The total cost of the cashiers is AED60, 000. The table shows calculation of waiting time for customers when the company employs 25 cashiers.

An increase in total number of cashiers reduces the average waiting time in the line to 0.00952 while the average time in the system reduces to 0.05952. The total cost of the cashiers increases to AED75, 000.

Forecasting

The table presented below shows a summary of the forecasting results from addition of cashiers.

The summary in the table above shows that the percentage decline in average waiting time (92.32%) is greater than the percentage increase in cost of cashiers (25%). This implies that the benefits of adding cashiers exceed the cost. This indicates that the company will gain by adding the cashier. Therefore, based on the cost benefit analysis, the company should add cashiers.

Linear Programming

Linear programming and sensitivity analysis are important statistical tools for making decision based on examining the interaction between different variable inputs to generate ideal output (Powell, 2011). Specifically, linear programming is significant in ensuring that optimal output is achieved by subjecting different input variables and constraints for the best solution at the least cost. In this case, the supermarket intends to add more service points denoted by X and Y. The store is aware that the cost of service point X is $10 and can be fitted in a floor space of 6 square feet to hold cash cabinet that are 8 cubic feet in depth. The cost of a unit of service point Y on the other hand is $20 and needs a service space of 8 square feet in order to hold cash cabinet that have a depth of 12 cubic feet.

The store has $140 to acquire service points X and Y to fit the service space that can accommodate cash cabinets within 72 square feet. In order to determine the number of each model of service points to be purchased to offer maximum storage capacity, the variables to consider are x; number of X model service points, and y; number of Y service points to purchase. Obviously, y > 0 and x > 0 since there is no way the store can make negative purchase of service point cabinet X and cabinet Y. The next step is to take into account the floor space and costs at maximum storage capacity. In this case, the floor space and costs are the constraints with the volume being the optimization equation as summarized below.

• Cost: 10x + 20y < 140, or y < – (1/₂) x + 7
• Space: 6x + 8y < 72, or y < – (3/₄) x + 9
• Volume: V = 8x + 12y

The equation can be plotted in the linear graph inclusive of the two constraints as indicated below.

From the above graph, when the corner points are tested at (12, 0), (0, 7), and (8, 3), the maximum volume that can be obtained is 100 cubic feet through purchasing 3 units of service point cabinet Y and 8 units of service point cabinet X.

Statistical Quality Control and assignment model

There are several methods of carrying out sensitivity analysis, depending on the number of inputs and outputs to be calculated. Among the notable methods of carrying out sensitivity analysis include One-at-a-time (OAT), scatter plots, regression analysis, variance-based method, and screening. Under the OAT method, the strategy is to examine how variation in a factor at a time affects the output generated. For instance, a single input variable is moved while maintaining other normal variables at the baseline. The moved variable is then returned at the baseline after which another variable at the baseline is moved. The process is repeated depending on the number of variable inputs (Slack, 2012). In relation to the Carrefour Department Store in Abu Dhabi, the choice of service point being preferred by customer is assumed to be dependent on the variables of time of service and per service cycle by different cashiers in the store. A set of data was collected on the trend to represent the service counter preference of customers within the store cashier lines. The information was generated in a table to rank ten pairs of observations for x and y where x=seconds by cycle and Y=seconds per item. The data was then plotted in a graph below to indicate the results.

In order to carry out sensitivity analysis, there is need to establish the input variables (seconds per cycle and seconds per item) and output (preferred service line). The above data can be used to generate a scatter graph by randomly picking values and plotting against service per cycle and per item as indicated in the table below.

From the scatter graph generated above, the sensitivity coefficient was established at 0.8308 by using the linear regression equation y=-0.5226x+84.436. Apparently, the choice of cashier counter is highly sensitive to the duration a cashier takes to complete a service cycle and passing each item over the cash point.

Discussion

From the findings of the quantitative examination, there is need to reorganize some of the operational strategies of the Carrefour Department Store in order to ensure that the current quality model is sustainable in the long terms. Since operations administration framework determines accomplishment of the business strategy, the Carrefour Department Store should create a small scale inspection unit for interior decision-making as opposed to depending significantly on full scale market environment, especially in implementing the proposal to increase the number of cashiers by four. For example, the strategy for balancing the cashier efficiency and correspondence as part of the administration standards in quality management should be credible (Powell 2011).

In addition, the part of restricting work and variables of creation will assume the most essential part in the operations administration system. This is a direct result of the part of social importance regarding dialect, inclination, and utilization that may be in the objective of the Carrefour Department Store. Choices made ought to be subject to accessible assets such as venture portfolio, work force size, experience, and proficiency for a particular task requiring particular capabilities. These outcomes would give a top to bottom estimation of circulation of success for future expected returns since increasing the number of cashiers will result in increased efficiency (Escrig-Tena et al. 2011). The specific recommendations for adjusting the current operations management through increasing the number cashiers is discussed below.

Adopting the Flexible Monitoring System (FMS)

Business productivity reflects the ideal usage of distributed variables in creation of products at the most cost effective module. From the above refection, it is clear that the Carrefour Department Store should integrate the Flexible Monitoring System (FMS) to balance the quality variables that determine the magnitude of service delivery sustainability in the short-run and-long run (Witcher & Chau 2010). In spite of lower rates of return beneath the projection, the general impact of adopting the FMS is that the company will have advantages that will exceed its restrictions since the increased labor force will translate into increase customer service delivery. For example, when the FMS is completely embraced as proposed, the company will be in a position to manage costs as result of delays and logistics management.

Despite the fact that the value of the Carrefour Department Store is lower than often anticipated, the FMS will make it reasonable since it manages the element of costs in managing operations through ensuring that optimal productivity is achieved at the least possible cost, especially when integrated in the new cashier service charter (Escrig-Tena et al. 2011). In addition, the part of productivity as a consequence of FMS will push the generation logistics management towards manageability over a long period of time. Fundamentally, the prompt adjustment of the proposed FMS will contribute towards supportability in the part of cost, reliability, velocity, quality, and adaptability of the current operations management module. In particular, the increased productivity at the least cost will give room for development of different products lines with a labor force of 24 cashiers without expanding the physical production utilities in each of the four departments. More space means more products being created inside of same production lines.

Through enhanced flow in the customer service schedule, the Carrefour Department Store is set to quickly and considerably pick up from the unwavering quality perspective when contrasted with its rivals. Since customers will have the capacity to get their request inside of a shorter time, the organization stands to gain from consumer loyalty and referrals (Powell 2011). Since the length of time of conveyance will diminish by around 92.34% of its present rate when the FMS is integrated, the organization is equipped to profit from economies of scale because of expanded ability to create and disseminate inside of a brief timeframe will guarantee increased productivity for different product lines currently being retailed by the Carrefour Department Store.

Within the dynamics of the Abu Dhabi retail industry, the quality framework is guaranteed by the integration of the FMS system since the customer service structures are well placed. Subsequently, when the framework is arranged effectively, the whole chain organizing these fragments would bring about ideal operations at the Carrefour Department Store, in terms of timely services to customers. In spite of the fact that operations administration frameworks experience steady transformation as a consequence of short term, midterm, and long term goal setting, no organization can work productively without quality framework (Slack 2012). Accordingly, quality will evaluate ideal production sustainability and competitiveness to ensure that the Carrefour Department Store is not only profitable but also efficient in managing the entire operations management matrix in balancing the cost as a result of increased labor force and improved customer service time. Furthermore, the efficiency requirement as integrated in the FMS operations administration tracks implementers of business procedure with a specific end goal to exhaustively confirm reason for supporting current, anticipated, and real results for each complete customer service cycle, through a quality awareness framework.

Adopting the Six-Sigma

The Carrefour Department Store should consider adopting the six-sigma approach in quality control and certification in the logistics support after increasing the number of cashiers. Six-Sigma is an ordeal of operations administration that is utilized to create business operations, which guarantee productivity through ideal and convenient service cycles. Six-Sigma is embraced to accomplish huge impacts of creation effectiveness through occasional audit of the generation logistics network across the major departments in an organization (Witcher & Chau 2010). Really, Six-Sigma is an arrangement of business occasions which conveys positive yields and creates business point of dependability in the customer service chain. Six-Sigma guarantees that service functions are vital and enhanced through proactive administration of the components of production such as labor, time, and ideal efficiency timeline in each complete customer service cycle.

The Six-Sigma is intended to diminish wastage in the productivity resources that can create unstable service cycle and inadequate output from each resource input in the form of increased labor force. Quality control is generally used to advance nature of business productivity. Six-Sigma typically incorporate workers to give optimal productivity through self appraisal and proactive way to deal with efficiency in job performance (Powell 2011). Six-sigma is done to plan, synchronize, and deal with the diverse exercises of organization through productivity module that is designed to manage the performance of each employee (Escrig-Tena et al. 2011). By actualizing the six-sigma approach at the Carrefour Department Store, the organization can focus the future dangers and obstacles in the execution of any service activity and take appropriate measures for addressing the unforeseeable dangers such as avoidable delays in customer service.

Modification of the Variables in Performance Management

Keeping in mind the end goal to accomplish quality operations administration, the current performance management matrix should be occasionally moved up to track the various working service models such as proportion examination in operation administration, which is perfect in proactive management of the entire performance matrix in the short term and long term production activities. These variables are achievable through quality assurance, production expansion, and inventiveness as part of the performance management (Escrig-Tena et al. 2011). The modification of performance management variables as a strategy is fundamental in the specialty of operations administration at the Carrefour Department Store (Witcher & Chau 2010). Notwithstanding, having proficient operations administration framework will enable the Carrefour Department Store to completely track the component of checking advancement at miniaturized scale besides the large scale customer service cycle, especially during the weekends.

The second technique for reviewing the performance management variables for the cashiers at the Carrefour Department Store should be adjusted to correspond to quality assurance strategies across the departments such as logistics, human resource, production, research and development, and supply chain. In order to guarantee success in the performance management, the quality administrators at the Carrefour Department Store should adjust both the performance trackers and complete service cycles across different departments as independent entities. This proposal will ensure that the Carrefour Department Store is in a position to locate areas with efficiencies or inefficiencies. As a result, the quality management strategies that guarantee long term commitments are satisfied in the service cycle in each department (Jaisnkar & Mistra 2011). This is conceivable in light of the fact that this model of operations administration framework takes into consideration operations process aggressiveness as it manages the superfluous overhead expenses from waste and under utilization of production input in the form of increased labor force.

In accordance with the primary goal of estimating the completeness of the operation management matrix, it is of quintessence to reverberate upon the standards of relative execution of distinctive contending operation variables as a major aspect of the operations framework at the Carrefour Department Store. For consistency, the parameters and variables utilized should be adjusted to guarantee that quality model is accomplished inside contending service matrices since the Carrefour Department Store has series of department with different service cycles. Keeping in mind that the end goal is to address the hidden issues in stochastic instability estimation, the parameters should rotate on the fringe of pertinent data which is steady with the genuine and expected results from the quality model (Harrison & John 2010). When the proposal is implemented, the Carrefour Department Store will not only be in a position to create an ideal performance management network but also track the progress of the customer service support functions such as labor, supply chain, and efficiency (Witcher & Chau 2010).

Conclusion

The Carrefour Department Store has a generally stable operations administration framework. The company has quality and proficiency certification framework that specifically affects the operations station, as the procedure is comprehensive of key and reasonable decision science. In order to reduce the waiting time in the supermarket, the researcher computed the average waiting time and total cost of cashiers after increase based on estimated number of customers visiting the supermarket per hour. The results of the calculations show that the percentage decline in average waiting time (92.32%) is greater than the percentage increase in cost of cashiers (25%).

This implies that the benefits of adding cashiers exceed the cost. This indicates that the company will gain by adding the cashier. Therefore, based on the cost benefit analysis, the company should add cashiers. In order to effectively implement the proposed change, it is necessary for the store to make alterations in the effectiveness column through embracing the Flexible Monitoring System, Six-Sigma, and execution variable to guarantee maintainability in its business operations after increasing the number of cashiers to 25. These strategies will ensure that the store can track efficiencies and inefficiencies in customer service cycle in each department.

Reference List

Escrig-Tena, A, Bou-Llusar, C, Beltran, M, & Roca-Puig, V 2011, ‘Modeling the implications of quality management elements on strategic flexibility,’ Advances in Decision Sciences, vol.1, no.1, pp.1-27.

Harrison, J, & John, C 2010, Foundations in strategic management, South Western Cengage Learning, Ohio, Oh.

Jaisnkar, S, & Mistra, N 2011, Quantitative techniques for management, Bharathiar University, New Delhi, India.

Powell, T 2011, ‘Total quality management as competitive advantage: a review and empirical study,’ Strategic Management Journal, vol.16, no.4, pp.15–37.

Slack, N 2012, Operations and process management: Principles and practice for strategic impact, Pearson Education Limited, Alabama, Al.

Witcher, B, & Chau, V 2010, Strategic management: Principles and practice, Cengage Learning, Alabama, Al.

Information About the Client

The client is a chain of grocery stores, a global food retailer Carrefour with a parent company located in France. The enterprise has been a successful food market member for several decades. The supermarkets of Carrefour chain in many different countries of the world are aiming at satisfying their customers’ needs for timely delivery of high-quality, fresh, organic, and healthy products. The goods offered by the company are affordable and cover a wide range of options. Carrefour works on leveraging the opportunities of profitable cooperation with farmers to ensure that the process for food items will be satisfying for all buyers.

Information About the Project/Product

The project concentrates on the popularization of the new initiative of Carrefour. This initiative consists in ensuring healthy product delivery for all consumers by providing “food transition for everyone” (“The food transition is underway, Carrefour is meeting consumers’ new requirements,” 2018, para. 4). The company introduces a new approach to cooperation with farmers and food producers. Within this new perspective, the chain of supermarkets shifts the farmers’ work to organic and pesticide-free production to ensure healthy ecological products for everyone.

Project/Product Background

The issue of air pollution, ecological disasters, and the exhaustion of planet resources is crucial for modern society. People who live in the cities and buy food items on a daily basis are more and more concerned about the methods how food is produced, where it comes from, and how healthy or dangerous it could be (“The food transition is underway, Carrefour is meeting consumers’ new requirements,” 2018). Carrefour’s priority is the health and well-being of its consumers. Since a healthy diet is the core of longevity and the absence of illnesses, it is the food industries’ responsibility to deliver the best quality of products. Regarding the described background, Carrefour initiates Art for Food to popularize ecological farming as the basis for food production for the supermarkets’ customers. Within the project, the client offers the buyers a wide range of organically produced food items for a reasonable and competitive price as opposed to a limited assortment of healthy products from other market members (Developing agroecology, n.d.).

Project Details

The project aims to create television and radio advertisements to promote organic food choices available in the Carrefour supermarkets. A TV ad will be about 40 seconds long and will portray a big family around a dinner table with beautiful and tasty dishes with a lot of vegetables on the plates. Children, parents, and grandparents are around the table and are having a meal. In the conversation between the mother who serves vegetable salad to a little son and the grandmother, the grandmother warns that it is better not to buy fruit and vegetables in a supermarket because of pesticides. In response to that, the mother points out the advantages of the Art for Food initiative of Carrefour and underlines that the goods from the company are healthy, ecologically pure, and nutritious for everyone. The budget for this TV advertisement is 25, 000 dollars, and the timeline is 14 days.

A radio advertisement involves the same plot with some background sounds of a happy family enjoying their meal at the beginning of an ad. The central idea of safe organic food available from Carrefour for every average consumer for a reasonable price is also delivered through the dialogue between the mother and the grandmother. The slogan “Organic and nutritious food from local farmers for everyone” will encourage people to trust the assortment of Carrefour and will increase its competitive capacity. The duration of the radio advertisement will be approximately 30 seconds. The timeline will be ten days, and the budget will equal 5, 000 dollars.

Target Market Analysis

The food and grocery market is probably the largest one all over the world. Since food products are the first range need of any person in any city or town, numerous companies inevitably compete to be the best and the most popular in the area. Carrefour is a big group of supermarkets in many countries both in Europe and in the Americas. Thousands of shops are opened all over the world and are striving to meet the newest requirements of the customers. However, the competition is enormous, and it deals with some similar companies tailoring organic food initiatives. One of the biggest competitors of Carrefour is Walmart which introduces a great variety of products for different types of consumers with different preferences in food.

According to the SWOT analysis, the following information could be presented. The strength of Carrefour is its flexibility in arranging cooperation with local farmers to ensure fresh products deliver on a timely basis, as well as its strong belief in the importance of organic production. The weakness of the company is the lack of supermarkets in the Asia region where the competitors might be more influential and invade the market. The best opportunity for Carrefour is its ability to reform the agriculture and food economy sector by initiating and encouraging pesticide-free food production and more active inclusion of farming into economic interactions. The emerging competition in different countries where the supermarkets of the Carrefour chain are presented is a significant threat for the company.

Target Audience/Product Positioning

The target product positioning should be based on the specific features of the sphere which is food retailing. Carrefour initiates organic food for a healthy diet for a reasonable price affordable for an average buyer. Similar initiatives are available from such a competitor as Walmart. The FCB planning grid shows the positioning of the product within the “Think/Feel/Low involvement/High involvement” quadrants (See Figure 1). According to Zimbres (2014), food products should be located in a low involvement and high thinking quadrant. In comparison to Walmart, Carrefour is located closer to a feeling dimension, but it is the target of the project to reposition it closer to the high involvement quadrant. Therefore, people will be more involved in the process of product choice by taking responsibility for their nutrition quality.

The Big Idea

The Unique Selling Proposition (USP) of Carrefour’s initiative for organic pesticide-free food products is to encourage people to trust the brand and identify the difference of its strategic policy from other competitive companies. The project will popularize the innovative approach to cooperation with local farmers. This perspective will satisfy two goals: the guarantee of freshly delivered products on a daily basis due to the close location of the producers, and organic, chemical-free, and healthy food as an affordable item for an average customer.

Targeting Strategies/Positive Product Differentiation

The revealed inside information articulated in the advertisements will differentiate the products offered by Carrefour from those presented by other competitive companies and will ensure its leading position on the market. To implement the project in practice, it is essential to incorporate all the advantages that deal with the offered initiative and concisely present them. Under the modern circumstances of the ubiquity of all sorts of advertisements, people will pay attention to something less provocative but more true and open. Thus, the project should allow its target audience to be informed and ultimately make a reasonable choice.

References

Developing agroecology. (n.d.).

The food transition is underway, Carrefour is meeting consumers’ new requirements. (2018).

Zimbres, T. M. (2014). Environmental advertising and food products: Is there an ideal matchup? Web.

Executive Summary

Carrefour has been a major player in the UAE, where it exists as a partnership between Carrefour parent company and Majid Al Futtaim group. The report shows that there is a major opportunity in online shopping, and with its large inventory of products and a well-coordinated supply chain, the company is in a good position to take advantage of the online trend.

It can do so by setting up an elaborate e-commerce platform that allows shoppers in the UAE to order goods to their respective addresses within the country. The report also identifies threat of rivalry as the main competitive issue to consider. Meanwhile the biggest limitations for the company as its surging labor costs while one of the most viable solution is to work on supply chain efficiencies to increase profit margins and also win customers based on price discounts.

Brief description of the organization

This report covers Carrefour. This is an international retailer and it has several hypermarket chains that originated in France in 1957. The company has been actively moving towards dominating the global retail market with several new stores in most promising markets for the retail business around the world.

Carrefour entered the United Arab Emirates (UAE) market in 1995 and it has been actively performing in the retail segment of the country. The company first entered into the country with a mission on expansion to the rest of the Middle East. In Dubai, it relies on a joint venture with Majid Al Futtaim group that allows it to grow rapidly and cover the entire country and its neighbors (Carrefour UAE para. 1-4).

External analysis

Current and potential opportunities

Customers can shop on the company’s e-commerce website and then pick their mode of delivery. An option could be a hybrid of e-commerce and traditional shopping. In this case, customers will shop online but after making payment, they will go to the store to collect their goods after they are packaged.

The advantage of the strategy is that it reduces the time needs to process payments as the customer does not have to queue. The company recently established a web store for its UAE market that allows customers to shop and pay for goods with various electronic payment solutions such as credit cards and PayPal.

The store offers customers with a wide selection of goods that are also in its physical outlets. Customers are able to use the website to move virtually through the store to know what to expect when they are physically in the store. The company’s online website is not very competitive compared to other global retail brands such as Amazon.

There is a big opportunity of using the reputation of Carrefour as a global retailer to promote the presence of its UAE online store. This should lead to increased sales and more customer intelligence that can help the company come up with new strategies on being ahead of the competition in meeting customer needs.

Carrefour can work with local suppliers to recognize local products and allow its customers to contribute to the development of community sensitive projects. For example, it can use its product origin and traceability systems to include a made-locally label that allows customers to make purchase decisions based on their need to support local businesses in the UAE.

This strategy will help the firm increase its reputation as a caring and development partner for the economy of the UAE. It will also enable the firm to reduce the power that local suppliers have against it in market dynamics. With the strategy, Carrefour will obtain an upper negotiating position for goods pricing, and this will go towards increasing its ability to offer discounts to price-sensitive shoppers.

Current and potential threats

The current threat facing Carrefour comes from its competition. Business rivalry threatens the market share of the company and its profit margin. Should the company continue operating with its present strategy and scale of the business, it risks losing a significant portion of its market to new entrants that already have a global presence, as well as local retail companies.

The major cities in the UAE, including Dubai and Abu Dhabi are home to many expatriate workers. This significant population is also a key attraction for retail chains that seek to achieve a Middle East success with the UAE as their main center of operation. They see the market is ripe for investments because of its high labor supply for the industry and its high disposable income that can support businesses growth (Scott para. 6-8).

Despite the attractiveness of the region, economic growth slowdown has led to increased costs of living for many people in the UAE as companies adjust their business forecasts and limit their expenditures. A slowdown in economic growth affects the disposable income of individuals and makes it more expensive to existing business to operate as costs of labor does not fall in accordance with economic performance.

The Carrefour UAE operations have to consider the high cost of labor and raw materials such as packing bags given that cheap plastic bags are not usable in UAE (Salma para. 1-2). While hiring talents employees is important, the business must also consider additional options for outsourcing to ensure that it does not remain exposed to the recurrent cost expenditure in a significant way.

Impact of national culture and conditions on the organization

National culture affects the employment relations and normal business operations. The company has to follow Islamic timings for its store opening and closing. It also observes local religious holidays and moral practices when dealing with human resource issues.

Internal analysis

Strengths and how they will be used

The company has a global reputable brand and it will use the brand to increase its sales in the UAE. It is also the most internationalized retailer in the emirates and this helps it offer a rich global experience to its shoppers. It is able to attract local shoppers seeking to experience a global shopping outing and get items from many countries around the world.

The internationalized concept also helps the firm attract new and talented staffs from around the world. It is able to sustain its position as preferred employer. The company dominates the top three positions of retail chains in the UAE and the global market. Its hypermarket strategy allows the company to offer a wide range of goods from all over the world.

Being a big company, the company has made numerous supply chain partnerships that allow it to offer its own-label portfolio. The range of products is in some of the fastest selling consumables in retail business and the products have created a market perception of price and quality by its customers.

Its early mover advantage into the UAE market has also been helping the company grow fast as it is yet to face significant competition among the global retail brands. Therefore, many consumers in the UAE seeking to shop at a global recognized outlet (Carrefour UAE Para. 6-8).

The company has been exploring strategic acquisitions as a growth strategy and it runs a multi-format strategy. It is able to sustain the sale of fresh food in all its outlets by working with reliable suppliers and ensuring that its staffs are well versed with all demands of a particular market.

Maintaining close relationships with suppliers in all its services range enables the company to be able to respond to price changes and demand changes effectively. Its retail business succeeds because the company is able to consider many inputs in the cost of products such as the value of foreign currencies in the UAE and the cost of transportation and storage of various goods imported from around the world.

With a target on the middle and low-income groups, the company sustains its operations by having its private label products that utilize economies of scale to sell at discounted prices. Another strength of the company arises from the high quality trained staffs that is able to offer high quality maintenance services and customer care services throughout its business including its supermarket and hypermarkets.

The company has a governance structure that allows both the local and global management departments to respond to emerging issues fast, and this should help it to tame any threats that it faces in the growing UAE retail market.

Weaknesses and how they will be minimized

The company lacks a comprehensive retail chain presence, this jeopardizes its strategy of benefiting from economies of scale, and offering discounts to its low-income shoppers suffers due to its limited retail presence. However, there are possibilities of limiting the business vulnerability. The company has an option of entering into more deals with local real estate companies to ensure that it gains a retail presence in upcoming developments like malls within the UAE.

Modern designated shopping areas are key attractions to shoppers of different kinds. They provide a company like Carrefour with the best option for growing its customer traffic in the medium-term. The company relies on its staffs to provide customers with a high quality experience. Any misunderstandings between staffs and customers, or negligence and bad behavior by staffs have the potential to ruin customer relations.

The company continues to minimize this weakness by constantly training staffs. It also has elaborate supervision frameworks. The in-store supervisors and production monitoring systems also help to highlight staff shortcomings in customer care. Based on the results that Carrefour gets from its appraisal system, it is able to minimize the weakness of poor quality of service delivery by staffs.

However, it still has to continue with on-the-job training programs to ensure that new staffs quickly adapt to the company tradition. Training should also concentrate on equipping staffs with cultural skills that let them deal with the UAE customers according to their cultural background expectations.

The global retail industry is moving to an online platform and the UAE as a market has become a prime location for embracing online shopping. Presence of high internet speeds and a significant number of customers who are conversant with internet technologies makes the country ideal for investment in online shopping.

A major weakness for Carrefour is that is has been lagging in its approach to online shopping and could be missing its competitive advantages. The firm needs to develop an online presence so that it rapidly scales its presence in the short-term. Customers also expect the company to have a serviceable online strategy.

Five-forces analysis

Bargaining power of suppliers

Carrefour has a major advantage over its suppliers because it has the potential to change its suppliers for various inputs. The brands sold in the retail outlets belonging to the company come from different suppliers. All suppliers have an intention to reach customers and the Carrefour business is a platform allowing them to do so.

Therefore, there is high competition among the suppliers and this competition causes Carrefour to get the upper hand in bargaining. In addition to that, the company enjoys low switching costs for its supplies including the labor and other service providers. Any changes in pricing by suppliers will not lead to a significant strain by the company due to the possibility of changing service providers or supply chain partners.

A high volume capacity that Carrefour offers to suppliers is makes it a preferred partner and this option motivates suppliers to enter into long-term discount agreements that allow Carrefour to operate profitable. In conclusion, suppliers lack bargaining power.

Bargaining power of customers

Customers to the retail outlets in UAE have nothing that ties them to a particular brand other than loyalty. They are free to shop anywhere and still get identical products. Many customers consider shopping convenience or the price of goods as the main influences of their purchase decisions.

They also consider the distance to the store and the type of shopping that they are going to do. The availability of parking space is also an issue that can influence a buyer’s decision. In the e-commerce segment, customer consider the speed of loading a website, the ease of browsing the site and checkout, as well as the shipping options availed by the company.

Based on the above understanding of the customer in UAE, Carrefour faces significant bargaining power from customers. It cannot increase the prices of items unless its rivals also do so. At the same time, it has to consider carefully areas for setting up its stores because of the foot and vehicle traffic potential. The store layout and the presence of amenities are other considerations that the company has to make, and in some instances, it may have to meet the cost of setting them up.

Threat of existing rivalry

The exit barriers for the business are low and weak firms can leave the UAE market without losing too much capital. At the same time, the strong firms have to keep investing in their potential growth to sustain their market share. Currently the UAE market has a high competition in the middle class retail market segment.

The demand for retail store space is increasing as the population increases. Rivals are diversifying their targets with different stores for different market segments. Depending on the location of a store, a firm can target high net worth individuals or low-income spenders.

On the other hand, the vacancy rates for retail space are low and this in an indication of high competition in the industry. Forecasts that show the retail business being immune to the declining oil prices form part of the reasons why many businesses in the industry are increasing their investments.

Carrefour UAE operations have to expand at every possible opportunity just to keep up with the growth trend; otherwise, the business will lose its market share (Oxford Business Group Para. 11).

Threat of substitutes

Many consumer product companies are opting to set up independent stores in popular malls around the city. At the same time, specialty stores in electronics, grocery, and furniture are also located in most malls that also have hypermarkets. Therefore, customers have a choice of where they can purchase their products.

Nevertheless, the hypermarket option still allows customers to enjoy the convenience of all products being under one room. They can compare prices and enjoy a traditional shopping experience. In addition to that, in long-end market segments, hypermarkets win for their ability to offer store-branded product at a reduced price. Carrefour uses the same strategy and therefore only faces moderate threat from substitutes.

Threat of new competitors

The entry of new players in the UAE retail industry is eminent. However, new companies will likely target a city before expanding to the entire country. This gradual entry and expansion strategy gives established players like Carrefour time to respond with counter competitive strategies. In this regard, the threat of new competitors is moderate.

The shortage of retail spaces in the major cities of the UAE is also a factor that weakens the threat by new competitors. However, competitors that have a strong global brand and an online presence can easily penetrate the market as customers adjust quickly to meet their preferences and need for identifies with people in other developed countries in North America and Europe.

Efficiency

A radio frequency identification solution for monitoring inventory within stores and along supply chains allows the company to meet its logistical demands. Its warehouses connect with its central logistics hub in Dubai and the company can manage purchase orders from the hub thus reducing communication lags.

Quality

Carrefour maintains a log of product movement throughout the processing and stocking in its outlets. It can pin point the position of a product in its supply chain and is able to determine the quality of the product at every stage of the retail process. Relying on reputable suppliers and training staffs on quality handling of products and customers ensures that they company builds on its competitive advantages.

Innovation

Carrefour UAE loyalty card is one of the innovative products by the company seeking to collect customer intelligence and increase repeat customer transactions. The shopping website targeting UAE customers is also an innovative approach at meeting customer expectation and bypassing limitations of a physical store presence in every part of the country.

Customer responsiveness

Presence on popular social media networks like Facebook allows Carrefour to respond to customer queries in a fast and informal ways that also works as a public relations activity. The company also maintains hotlines and customer desks at its physical stores to collect feedback and handle customer issues.

Customers also have a self-service website platform to handle their queries and management of their cards. They can also manage their online shopping accounts without the need for a direct contact with a customer care representative.

Discussion on distinctive competencies of the firm

From the discussion presented in the preceding sections, Carrefour’s distinctive competencies are its own-label brands and its central hub logistics processing system. They offer the firm the ability to be different from the competition and to cut costs significantly.

Rivalry is a major factor to consider in the firm’s business environment and an efficient logistics system allows Carrefour to be responsive enough to meet its competitive demands. However, rivals can copy logistics competencies even though they are costly. On the other hand, for rivals to develop successful own-label brands, they have to find capable manufacturing or processing and packaging partners.

Above all, they will require a brand that has already developed. Carrefour already enjoys a global reputation that does well in the UAE and this makes its own-label products serve as a distinctive competitive advantage that cannot be copied easily.

Does the organization have a differentiation strategy?

Carrefour does not have a differentiation strategy overall. Nevertheless, the company targets different customer segments with different product ranges and uses in-store displays to effect the strategy.

Strategic alliances that can benefit the organization

The beneficial strategic alliances that can benefit the company are with service providers and supply chain partners. Providers of various technologies for retail business management such as monitoring solutions for stock and employees can help maintain high quality services and keep costs low. Such solutions would be expensive for the retailer to develop on its own.

A partner providing the services is the best option. Another beneficial alliance would be made between the retailer and real estate companies. This can ensure that Carrefour gets the first option to set up stores in upcoming mall developments in all the UAE cities and avoid the space shortage threat.

Should the organization go global, why or why not and how will this be achieved

Already Carrefour is a global company, and its UAE subsidiary is one of the outlets in the Middle East. Expansion into more countries can come through partnerships, where local businesses provide resources while the retailer offers the brand and operation capabilities.

Major problems or potential problems the organization should address

Currently, Carrefour needs to address the lack of adequate marketing of its online shopping option. It must also come up with a long-term strategy of dealing with high cost of labor as it threatens to cut the profit margin and affect the business’ strategy for winning the low-end income market segment (Hubbard para. 3).

The company also lacks a counter strategy for dealing with the onslaught of company branded stores that are setting up in malls throughout the UAE to target high-end customers with their branded consumer products mainly in the electronics and computers sectors. Many of the products in the category allow Carrefour to earn a high profit margin and losing the business segment would be catastrophic to its store’s performance.

Recommendations for Carrefour

Carrefour has to expand its investments in technology as a way to cut its reliance on staffs. With a shrink in current staff numbers or a freeze on hiring of new staff, the business will be able to manage its labor costs in the medium term.

In addition, the company has to identify a real estate partner that has significant investment in retail business spaces in attractive locations in the UAE. Such a partner will enable Carrefour to expand rapidly. As a joint venture in the UAE, the business currently is in a position to use its local business networks to find more partners for achieving its objectives.

Given that the business already enjoys considerable power over its suppliers, it can continue bargaining for discounts and other favorable trade terms that let it extend price bargains to its customers to stop them from moving to the branded stores that are threatening the dominance of Carrefour.

Works Cited

Carrefour UAE. About US. 2015. Web.

Hubbard, Alison. Employment Issues in the UAE. 2012. Web.

Oxford Business Group. Demand Strong for Abu Dhabi Retail Space. 2015. Web.

Salma, Samir. “UAE Bans Non-biodegradable Plastic Products.” Gulfnews.com, 2013. Web.

Scott, Andrew. “Dubai Builders Turn to Community Malls Anchored on Food Retailers Geant and Carrefour.” The National Business, 2014. Web.

Demand Forecast for Carrefour

Carrefour is one of the leading hypermarkets in the United Arab Emirates. The firm has been successful in managing market competition posed by both local and international firms. Thomopoulos notes that the retail industry in this country is increasingly becoming competitive due to emergence of new firms (45). The management of Carrefour will need to develop an effective operational plan that will enable it to remain competitive in the market. To do this, it will need to prepare a demand forecast to determine how to plan for its activities. According to Altay and Adams, a firm can use a number of strategies to prepare a demand forecast (74).

The two most popular strategies include determining population increase and changes in market size. The researcher will use these two strategies to forecast the demand in the retail market in which Carrefour operates. Data retrieved from Thomopoulos shows that the city of Dubai’s population has been increasing consistently since 2008 (42). The increase is associated with high rate of immigration into the city. The figure below shows the consistent increase in the city’s population.

The pattern above shows that the demand for products offered at Carrefour will increase due to consistent increase in the population of Emirati’s most popular city. It is a fact that these people will have to shop for various products, from basic needs to luxurious products. Smith warns that it is always dangerous to assume that an increase in population will automatically result into an increase in demand for products (78). It is, therefore, necessary to use an additional model that would confirm the estimations made through population increase. The researcher used a report by Chase which estimated the growth of United Arab Emirates’ market size from 2009 through to 2016. Their research focused specifically on the retail market (48). The figure below shows the findings of their research.

The findings from these two approaches of demand forecasting strongly suggests that the demand for Carrefour products shall increase by about 15% within the next one year. The operations manager will have to plan for this change in demand to ensure that this firm has all the necessary products that its clients will need within that period.

Operational Plan

The demand forecast done above shows that it is very likely that the market demand for products offered by Carrefour shall increase within the next one year. In this operational plan, the researcher has identified operational issues that must be addressed in order to improve efficiency within the firm.

Product portfolio

According to Billings and Jones, when planning for an expected increase in demands for a firm’s product, one of the issues that must be looked at is the product portfolio (112). The management of Carrefour will need to have a comprehensive analysis of the demands for the existing products and determine if there are changes that should be made. In its stores, this firm offers a wide range of products from electronics and furniture to foodstuff, stationery, beauty products, physical fitness products, and fixture and fittings among others. In this area, the operations manager will need to determine the trends in the market to identify products which are becoming popular and those whose popularity is going down within the Emirati market. Boston Consulting Group Matrix may help at this stage.

Table 1: Boston Consulting Group Matrix

When reviewing its product portfolio, the matrix shown above may be of great importance. Based on the market trends, the firm will first identify products that fall under the category of stars. These are products which are becoming increasingly popular within the Emirati market. These products may include fashion wears, kitchen materials, electronics, or food items that the local community is popularly using.

The products should be made readily available at the stores. The management will need to identify reliable suppliers that will deliver these products to meet the increasing needs in the market. The second category of products falls under the quadrant of cash cows. These are products whose popularity has reached peak. Although the growth of their market is slow, they have a wide market share that earns the firm a lot of money. As Chase notes, cash cows earn a firm attractive income without the need to invest much in them in terms of advertisements of product redesign (48). The management will need to ensure that these products are also available in the market in quantities that reflect the estimated demand increase.

The next category of products falls under the category of question marks. These are products whose market growth is high, but their market share remains low. It means that although the product is relatively popular, the number of people who purchase the product regularly remains relatively low. As the name suggests, these are products that demands for some actions to be taken because of their low profitability despite their increasing popularity.

The management of Carrefour will need to identify these products when defining product portfolio for the forecasted period. Once they are identified, it will be necessary to redefine them to improve their appeal to a wider market. This may involve adding features that clients may desire in them. In case the products are manufactured by other companies and delivered to this firm as finished product, then the operations manager will need to communicate with the supplier so that the product can be redefined to make it more appealing to the local customers in United Arab Emirates.

The last category of products falls under the quadrant known as dogs. The name given to this quadrant clearly suggests the undesirability of products found here. These are products with low market share and low market growth. The name dog suggests that these products are more harmful to the prosperity of a firm than they are beneficial. At Carrefour, this category of products must be identified at all cost when defining the future product portfolio. These are products that may stay in the shelves for more than two months without being purchased. It means that they end up limiting shelf-space for other popular products in the supermarket. Having these products in the shelves only leads to a loss instead of creating profits for the firm. A good example of such a product may be a cathode-ray television set that has since been replaced by LED and LCD television sets. Such products should be eliminated from the shelves when introducing the new product portfolio.

Location and number of facilities

According to Smith, location means everything when setting a retail business (52). Dubai is currently the most populous city in the United Arab Emirates. Majority of the residents here are in gainful employment. It means that they spend most of their time at work, and have very little time to go shopping. Carrefour should be careful in when setting the location for its stores in case it plans to build new ones. They should be conveniently located, especially close to the bus or railway stations. This way, shoppers can easily get into the stores and make their purchases while waiting for their means of transport.

These shops will need to take advantage of the power of display to convince window-shoppers to get into the shop. Although they may not pick the item that is attractively displayed on the store, they may end up picking another item that they needed. The power of display may also encourage impulse buying, especially among the youth. Finally, the firm will need to have online stores where other shoppers who cannot make it to the stores can purchase products they need in an online platform. The focus is to ensure that customers from different categories will be catered for irrespective of their location in the country.

Supply chain management, outsourcing partners

Supply chain management is a critical issue when planning for an increase in demand for a firm’s products. Carrefour does not manufacture most of the products in its stores. The firm relies on suppliers both locally and internationally to deliver products that it has in its stores. Most of the electronics come from Japan, China, the United States and Europe. These products must be available in various locations within the United Arab Emirates at the right time.

It may be challenging for this firm to organize for these products to be transported from their source point to the market where they are needed. To solve this problem, the firm may need to have outsourcing partners, especially transport companies, that will ensure that these products reach the stores of this firm at the right time, in the right quality and right quantity. Locally available products such as fresh vegetables can be sourced directly from the consumers. The management can form a strategic partnership with the suppliers to ensure that they deliver these products at the right time in all the stores of this firm.

Logistics

The issue of logistics will be a concern because the forecast shows that this firm will need to move more goods from one location to another than it deed in the past one year. The management may address this issue in two ways. The first approach may be to purchase new vans and tracks that will be used to transport products from its warehouses to the stores. The vans will also be used to deliver products that are purchased in the online platform.

This strategy is capital intensive, but it gives the firm full control of the logistics management. The second approach may involve outsourcing this department to a trusted logistics firm. The contracted firm will coordinate very closely with the sales and procurement units of Carrefour to ensure that movement of goods from one place to another is done efficiently.

Production

Carrefour produces some of the products within its stores. For instance, it has a unit responsible for baking bread, cakes, and other related products. Most of these products have a huge market share in this country and may be classified as cash cows. The forecasted increase in market demand means that the amount of these products should increase within the next one year. The production manager may restructure this department by hiring more employees and purchasing new production equipment to meet the expected increase in demand. The raw materials needed by this department must be come from very reliable suppliers who are known to deliver high value consistently. For other items manufactured by other companies and sold in this hypermarket, the management must be assured of their availability to avoid disappointing its loyal customers.

Risk Management

The increased level of operation that is expected within the next one year will come with additional risks. The risk of fire outbreak is real given that there is heavy use of electricity and that some of the products within the stores are explosive. There is another serious threat of terror. According to Jannie, terrorist groups, such as IS and Al Qaeda, are currently using a new strategy that targets shopping malls in major cities (52). It has been witnessed in Europe, North America, and Africa. The threat is real, and it can occur in Dubai. Carrefour as a firm has no capacity of deterring such terror threats. The only way of managing these risks is to take a comprehensive insurance cover for all the perceived risks which are beyond control of the firm.

Warehouse levels

The level of warehousing is equally expected to expand proportionately with the increase in sales. Some of the products sold at this hypermarket come from as far as North America. The cost of logistics is high, making it more convenient to transport them in bulk. When they arrive, the firm will have to find ways of storing them when the shelf-space is limited. The logistics department may need to expand the current warehouse space because of the expected increase in flow of products. It is not advisable to outsource warehousing services because this is a very sensitive department that cannot be entrusted to a third party.

Sales Channels

Carrefour will use two main sales channels in the market to meet the needs of its clients within the country. The first channel will be through its brick-and-mortar stores which are strategically located in major cities in the country. The current outlets in Dubai and Abu Dhabi may be sufficient even if the number of clients increases as forecasted. The second strategy will be through online platform. This firm will need to sell its products through its website to online clients within the country.

Administration and Processes

The administration of this firm, especially in top managerial activities, will not experience major changes. The impact will be felt in operational processes where more human resource and machines will be required to meet the increased customer needs. Processes in the logistics, sales and marketing, finance, and warehousing departments will need more attention within the next one year. The firm may not avoid hiring more employees in these departments to undertake new tasks. At the point of sale and at the inspection areas, more machines will be needed to improve efficiency.

Works Cited

Altay, Nezih, and Lydia Adams. Service Parts Management: Demand Forecasting and Inventory Control. London: Springer-Verlag, 2011. Print.

Billings, Ruth, and Clive Jones. Forecasting Urban Water Demand. Denver: American Water Works Association, 2008. Print.

Chase, Charles. Demand-driven Forecasting: A Structured Approach to Forecasting. New York: Cengage, 2013. Print.

Jannie, David. United Arab Emirates yearbook 2005. London: Trident Press, 2013. Print.

Smith, John. United Arab Emirates: Selected Issues and Statistical Appendix. Washington: International Monetary Fund, 2011. Print.

Thomopoulos, Nick. Demand Forecasting for Inventory Control. Hoboken: Wiley & Sons, 2015. Print.